SA recession sees increase in illegal gambling operations

JOHANNESBURG - Despite the gaming or casino industry growing its gross gambling revenue (GGR) by 3.5% to R18.5 billion in the year to end March 2018, the recession in the first half of this year has increased the number of illegal gambling operations.

A growing uncertainty regarding the gambling regulatory framework is making it harder for the industry to realise its full potential as a generator of jobs and tax revenue.

This gaming industry provides roughly 38 000 jobs.

The Casino Association of South Africa (Casa) warned this week that the challenges that led to the previous decline in GGR were worsening.

The 3.5 % increase in GGR was below consumer inflation, so in real terms it continued to contract after a dismal 2017 when nominal GGR fell by 1.8% for the first contraction in nominal terms since the industry’s inception in 1997.

Casa said it paid 37% of GGR or R6.1bn in taxes and levies at national, provincial and local levels in the year ending March 31, 2019.

This made the government the largest recipient of value generated by Casa member casinos.

The nearly R2bn Suncoast Casino expansion includes the popular Barnyard theatre.Despite the casino industry growing its gross gambling revenue by 3.5% to R18.5bn, the recession increased the number of illegal gambling operations.

According to a new report from auditors PwC, the gaming industry in South Africa is set to grow at a compounded rate of more than 5% a year to reach nearly R35bn by 2021. Casa chief executive Themba Ngobese said Casa members were committed to contributing to a better South Africa.

“Casinos attract investment and tourism to the country, and the money members pay in taxes and levies is used to improve everything from education and healthcare to infrastructure and housing.

“One of our biggest concerns is the exponential growth of illegal gambling operations. These illegal operators pay no tax or levies and contribute nothing to the South African economy. As an industry, we once again urge law enforcement to take a tougher stance on these illegal operations, which are essentially stealing from us all,” Ngobese said.

Casa has warned that recent proposed changes in legislation such as anti-smoking regulations, could put the casino industry under regulatory pressures on a number of fronts. Banning all smoking could see as much as an 18% drop in GGR nationally, Casa said.